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responding reduction has been made in this department of the public service; which I have no doubt will concur with me in thinking should be extended to other departments at Collingwood under the control of the General Government.

In addition to the Collingwood gold-fields, other auriferous districts, including those of the Tadmore, Wangapeka, Baton, Waimangaroa, and Buller, have been prospected and partially worked, with more or less success. I have not considered it necessary to bring either of the places mentioned under the operation of the Gold Fields Act, in consequence of the limited number of diggers employed, and their particularly good conduct in preserving the peace; respecting as they have done, each other's rights, and mutually aiding one another in carrying out their own views of equity in the apportionment of the land constituting their claims. By this very exemplary conduct, as they have done, with their staffs, has been avoided; and it will be as pleasing to you as it is to me to know that no circumstance has hitherto come to my knowledge showing the necessity for the employment of a single constable.

Should, however, a large accession to the present number of diggers take place, it is scarcely to be expected that this highly satisfactory state of things will remain. It is probable that an addition to the present number may include some lawless characters, in which case it will be my duty, for the purpose of preserving law and order, to appoint the necessary officers with a sufficient force at their command to execute these objects. I am, however, reluctant to advise that any sum should be specifically voted by you for this purpose, which, if not required, could not, in consequence of a recent Act of the General Assembly, be applied to Public Works. It, therefore, appears to me to be desirable that any sums voted for this or similar purposes, would be better brought under the heading "Miscellaneous Services," thereby leaving it to the Government to appropriate it to such objects as the interests of the Province may, in its opinion, require.

5. Hitherto I have not shrunk from the responsibility of expending portions of the public revenue on objects which I have considered likely to promote the welfare of the Province, although they had not been previously voted by the Council. In so doing, however, I have been fully conscious of the weight of that responsibility, and I have never exercised it without feeling confident that my acts in so doing would meet with the approval of the people as well as their representatives. I am happy to say that in no one instance have I been deceived in this respect, the Council having always voted the sums so expended in its subsequent Session. The Act in this case, and the Act to which I refer, makes this mode of proceeding no longer practicable, as, under its provisions, expenditure by the Superintendent of a province of any sum either not voted by its Provincial Council, or in you will concur of its votes, is made an offence, to which heavy pecuniary and other penalties are attached. I trust you will hardly expect that I should do any act that would render me liable to prosecution for a penal offence, much as I regret the injury and inconvenience that may arise from the mode in which it is proposed by this Act to attain an object in itself laudable.

6. My opinion on the New Provinces Act has been more than once frankly stated to you. On the present occasion it appears to me advisable to call your attention to the position in which you might be placed with respect to any settlements on the West Coast, should any considerable number of diggers resort thither. You are aware that any person can acquire the miner's right for the sum of £1, and that this right confers the power of voting at elections.

Under the New Provinces Act, then, it would require but 201 holders of miner's rights to compel the erection of the West Coast district into a separate Province. In authorising the expenditure, as you will be requested to do, of large sums for throwing open and otherwise facilitating the settlement of that part of the country, it seems to me that you will naturally consider it desirable that you will take some steps towards procuring the amendment of some Act in question, at least by the consent of some provision for very considerably increasing the number of electors and amount of population entitled to claim separation from the parent Province. This is more particularly necessary where the population exercising this power will contain a large number of those who from the nature of the case have more inducements to change their place of residence, and consequently, are less likely to become permanent settlers in such a district than persons engaged in other occupations.

7. The General Government having made some alterations in the steam postal service of the colony, of which I have been informed in a private letter from the Postmaster-General, I have postponed taking any conclusive steps in the matter, until I could have the benefit of an expression of your opinion upon the proposed arrangements. The alteration that has been made is, as you are aware, the removal of the direct line of steamers between Sydney and Cook Strait. To provide a substitute for this it is proposed to pay to the inter-colonial Royal Mail Company a sum of £5,000 a year as a subsidy for running a steamer from Sydney to Cook Strait and back in the month, touching only at two of the three ports of Nelson, Wellington, and Canterbury. Of this £5,000, £2,000 is to be paid by the General Government, and the remaining £3,000 is to be raised by two out of the three provinces just named. The question for your consideration will be, whether it is advisable to pay a subsidy of £1,500 a year for a steamer which is apparently to be used for the conveyance of passengers and merchandise only; a business which there is some reason to believe would be of sufficient extent and importance to induce the placing of a steamer on this line without any bonus whatever. Irrespective of the impolicy of saddling the future revenues of the Province with a sum which would probably absorb, by anticipation, nearly a fourth of its share of the Customs revenue, we have also to provide a subsidy for your Provincial steamer, I am of opinion that the adopted by it should include the establishment of a direct line of mail steamers between Australia and Cook Strait.

8. Some time back I received a letter informing me that his Excellency the Governor would authorise the raising, by the Province, of a loan to defray the expense of the erection of a new Post-office, and also, though this is doubtfully indicated in the letter, of a new Gaol in the Province. I am not aware that complaints whatever of the insufficiency of the buildings at present used for those purposes, I am not aware that any urgent necessity exists for any such expenditure. The letter, however, states that, in this, the Provincial Legislature will make the necessary provision, the Government will feel itself called upon to propose to the General Assembly, at its next Session, to sanction the necessary expenditure charging the amount against the Province. This letter will be laid before you, and I shall be glad to receive the expression of your opinion upon it.

9. There is much greater and more pressing necessity for a Lunatic Asylum. Had the House of Representatives